Preface This is a fictional case study to serve as the basis for an educational service-development exercise. Even though the inspiration for features of the case can be mapped in part to the current marketplace, no element of this case (products, services, companies, statistics, or regulations) should be considered factual.

Product Concept and Market Review Industry Background The food-service industry in the form of fast-food or table-service restaurants is forecast to advance 4.4% in 2009 and to constitute 4% of the U.S. gross domestic product. The overall economic impact of such businesses is expected to exceed $1.2 trillion in 2009, including sales in related industries such as agriculture, transportation, and manufacturing. Between 1970 and 2009, restaurant- and fast-food-industry sales have posted a compound annual growth rate of 7.1%. This industry’s share of the food dollar is estimated at 46.4%, up from 25% in 1955. This year, the nation’s 878,000 restaurants should hit $440 billion in sales according to the National Dining Association’s 2009 Dining Industry Forecast. Restaurants are the nation's largest private-sector employer, with one-third of all adults having worked in the restaurant industry at some time during their lives. Nine out of ten salaried employees at table-service restaurants started as hourly employees. The number of food-service managers is projected to increase 15% in the next ten years. The trend to eat out shows no sign of abating. Seven out of ten adults agree that there are more nutritious foods available to them in restaurants now than there were five years ago. The Internet is changing the competitive environment for restaurants and fastfood outlets. A full 40% of consumers at restaurants and fast-food outlets have used email or the Internet to find out information about establishments they haven't patronized before. Company Profile Culinease Corporation is a food-distribution company delivering foodstuffs and partially-prepared meal items to restaurants. It has been in business since 1992. By means of its excellent production and distribution system, broad product line, competitive pricing, and rapid-response deliveries, Culinease has been successful in establishing strong relationships with its customers, the table-service restaurants. As the restaurant business has grown, Culinease has increased its warehousing capacity, and is currently offering the highest variety of foodstuffs and meal items of any restaurant supplier in the country. Page 2 Although Culinease’s sales have been growing an average of 10% per year since 1998, the future appears uncertain. Several competitors have recently entered the market and eroded Culinease’s market share, currently at 18%. Two competitor corporations, TasteRight and BudgetShrinker, have successfully captured 15% and 14% of the market, respectively. TasteRight offers excellent customer support and reliability, while BudgetShrinker offers the lowest prices. Culinease has eight production facilities and over two dozen warehouse facilities. It has over 50 suppliers and serves over 7500 restaurants. 

In 2007, Culinease installed enterprise data management software in all of its facilities, which helped improve its overall efficiency. In an effort to extend its reach, Culinease has made several attempts to establish its presence on the Internet; however, its investments have not been fruitful. Unfortunately for Culinease, most of its facilities are underutilized. The Culinease management has been looking at its options for expanding the business. In the past, Culinease has grown by evolving its product line. However, such opportunities are becoming rarer. Despite 9% growth in 2008, Culinease’s market share dropped by 2%. Market Opportunity To maintain its standing as market leader, Culinease plans to enter the promising new arena of restaurant-meal home delivery by coordinating a meal-preparation and delivery service that will involve over 4000 restaurants all over the U.S. The name it has chosen to give this new business is NetMeals Tonight. The initial system concept is for users to register on a Culinease Web site, where they will enter their postal zip code and then have access to all the possible menus available in their area. These menus will include both Culinease-brand meals and custom meals from individual restaurants. Not all zip codes will be served. Some menu items will be available for immediate delivery as in the traditional take-out business. Other menu items, such as Peking duck, will need to be ordered at least 24 hours in advance to allow the Culinease logistics system time to complete the order. Once customers place their orders, the Culinease meal-plan system will assign each order to a particular restaurant, and the local delivery system will be alerted to schedule both pickup and delivery. The delivery system will be operated like a taxi service with vehicles and drivers serving multiple restaurants and consumers within a well-defined geographical region. In addition to offering consumers a wide variety of menu choices, the Culinease Meal Plan will also enable its users to customize meal preparation by noting their food allergies, favorite ingredients, and spice preferences. Users will be able to schedule and update meal orders up to a month in advance. Net Meals Tonight will consist of two basic subsystems: the front end and the back end. The front end will deal with the customer interface to the system: the Web site and database and the ordering, payment, and user-tracking functions. The back end will deal with the restaurants and local delivery systems. The back-end system will interface with the existing Culinease system that manages all of the upstream operations (raw material supply, production, warehousing, and distribution to restaurants). 

The advantages of NetMeals Tonight from the individual restaurant’s perspective will be a) to increase its meal-preparation volume without having to increase its wait staff, dining facility, or delivery staff and b) to gain greater publicity for its unique menu. The advantages from the consumer’s perspective will be a dining Web site that is available at all times, remembers individual preferences, and vastly simplifies the meal planning process. For those who are interested, the Web site could enhance the menuplanning process with suggestions, nutrition calculations, and side journeys into such things as the history of particular recipes. For Culinease, the system will put the company into direct contact with consumers and enable it to both grow its brand of prepared meals and accumulate a large database of consumer preferences and behaviors. The cost per delivered meal will be kept low because the system will make effective use of both large Culinease kitchens, which enjoy economies of scale, and local restaurant kitchens which can add last-minute meal customizations, such as fresh vegetables. By encouraging consumers to schedule orders days and weeks in advance, Culinease will have superior forecasting abilities that will enable it to optimize production schedules and to deliver prepared meals to restaurants in time to meet customer orders. Of course, a certain percentage of orders will be subject to cancellation and change at the last minute, so the system will require some safety stock. With the implementation of NetMeals Tonight, Culinease forecasts its growth rate will exceed 15% the first year and exceed 25% the next. The two major competitors to Culinease, TasteRight, and BudgetShrinker, are likely to enter this market themselves with similar offerings. The competitive analysis below is a projection of how their services are likely to compare, based on their current business practices. Market Conditions Competitive Analysis The following is a brief comparison of the services provided by the competitors of Culinease, based on their anticipated features: 

a) Company Name – Culinease Corporation Service name – NetMeals Tonight Delivery charges – Moderate Items on the menu – Exceeding 700 On-time delivery – Excellent Delivered food quality – Very good to excellent Web-site interface – Superior consumer experience Threats and weaknesses – Lack of experience in the consumer market (but competitors have similar lack of experience) 

Strengths and opportunities – Long-standing market leader; experienced in preparing basic meals and providing raw materials to restaurants; competitive (if not lowest) prices; high reliability; and customer support Page 4 b) Company Name – TasteRight Corporation Service name – Web Diner Deluxe, a name emphasizing its up-scale nature Delivery charge – $8 on minimum order of $20; $10 or more for out-of-zone orders Restaurant database – 2000 restaurants nationwide, typically high priced and gourmet style Items on the menu – Exceeding 500 On-time delivery – Excellent Delivered food quality – Very good. TasteRight claims to preserve the original restaurant taste of the meal even after transport to the consumer. Web-site interface – Well designed, interesting, reasonably fast Threats and weaknesses – High delivery charge; a limited variety of restaurants Strengths and opportunities – TasteRight has established a reputation with customers for on-time delivery Culinease’s response to TasteRight: Match quality at a lower price and emphasize value. c) Company Name – BudgetShrinker Corporation Service name – Cyberfood 2U, a name emphasizing mass appeal Delivery charges – Free delivery within zone Restaurant database – 3000 restaurants, typically lower priced and family style Items on the menu – Exceeding 250 On-time delivery – Poor Delivered food quality – Mediocre (frequently cold) Web-site interface – Reasonably fast but not interesting Threats and weaknesses – Lowest prices on meals and deliveries; cuts corners on quality; Web-site look and feel says “cheap” Strengths and opportunities – Established reputation among budget-conscious consumers for guaranteeing the lowest price Culinease’s response to BudgetShrinker: Emphasize quality in both back-end and front-end consumer experience. 

Customer Profile The target market for this new service will consist of singles, couples, and families who frequently eat out at table-service restaurants but who would eat at home if the quality of food matched in-restaurant meals and if the planning, ordering, and delivery of meals were simple and reliable.

Market Strategy Success in this new market will require excellence in both back-end and front-end systems. The front-end system must be both engaging to consumers and efficient at taking them through the order-entry process. The backend process must be effective in transmitting the order throughout the supply chain to ensure rapid meal preparation and delivery as well as stock replenishment. Meal preparation and delivery processes must be designed and performed so as to ensure consistent quality and exceptional food safety. Meal price and delivery charges must be within the range identified by competitive analysis. Investment. No capital expenditures are required for food production or delivery. The new business will use the existing Culinease production and distribution system and the kitchens of Culinease’s current customer base of restaurants. Delivery to consumers will be contracted to third-party delivery companies, such as local taxi services. Quality-of-service guarantees (such as “98% of deliveries shall be on time”) will be negotiated in the contracts with these third parties. The major investment will be in the development of the front-end Internet-based menu browser and order-placement system. The basic system is projected to cost $1 million to develop and populate with data. Ongoing annual maintenance and support are expected to be 10% of that figure

Requirements:

You are required to develop an information system for any project of your choosing. The system must solve a problem or take advantage of an opportunity in your country. The project documentation must have the following sections:

Project Title

Project Charter:

Background

Project Description

Objectives

Requirements Specifications

Constraints

Assumptions

Governance

Team Composition

Stakeholders

Schedule

Risks

You have to use the case to answer, some of the requirements. (as a guide, you will include a piece of the cause in some part of the guide)

Answer rating: 100% (QA)

Project Title NetMeals Tonight Project Charter Background Culinease Corporation is a fooddistribution company delivering foodstuffs and partiallyprepared meal items to restaurants It has been in busin... View the full answer